PETALING JAYA: Residential property prices are expected to surge in 2021 after stalling this year due to the Covid-19 pandemic, according to a nationwide study by real estate sales and media company Juwai IQI.
In its Q1 2020 Property Index and Survey for Malaysia, Juwai IQI predicted that residential property prices would stagnate in 2020 with an increase of only 1.1%.
Group executive director Kashif Ansari said the drop in number of property transactions due to the movement control order (MCO) was also causing property prices to stagnate.
“The industry is optimistic, however, about a post-pandemic recovery and expects residential prices to rise by 8.6% by 2021.
“Amid all the uncertainty, property is viewed as a relatively safe investment that can provide cash flow.”
He added that Bank Negara Malaysia’s six-month moratorium on interest and principal payments for loans had provided relief to property owners besides easing the pressure on the real estate market.
The survey, which was conducted among more than 340 real estate agents from Feb 7 to March 19, also revealed that rental rates are expected to rise by an average of 1.7% through the end of 2020.
“The findings showed that Sarawak has the highest forecast rental growth at 5.4% in 2020. Penang has the most negative forecast, with rental rates there expected to fall by 5.8% in 2020.
“But looking forward two years, agents are more confident about rental rates. Nationwide, agents expect rental rates to climb by 7.1% by January 2022,” Ansari said.
He added that property would likely remain attractive to foreign buyers due to the country’s strategic location.
“Its close proximity to countries such as Japan, China, Hong Kong and Singapore, which are the world’s largest cross-border property buyers, makes it even more appealing.
“For investors and first-time home buyers, now is definitely a good time to consider getting into the market, as there are attractive discounts offered by developers.”
About 61% of real estate agents who participated in the research expected first-time local buyers to make more property transactions in 2020 than in 2019. Meanwhile, 55% of agents expected foreign buyers to conduct more transactions.
The survey also revealed possible consumer changes in property buying, with greater use of online tools such as virtual reality, 3D rendering and live-streaming, to facilitate marketing, research, and purchasing of real estate due to Covid-19. – FMT